France suggests pause on ‘poisonous’ US-EU trade standoff

French Foreign Minister Jean-Yves Le Drian participates in a session of Questions to the government at the National Assembly in Paris, France, 17 November 2020. [EPA-EFE/MOHAMMED BADRA]

The European Union and the US should “pause” a long-running tariff disagreement to allow the issue to be resolved, France’s foreign minister suggested Sunday (17 January).

A 16-year spat over aircraft subsidies has turned increasingly sour under the Donald Trump administration, expanding to other products and sectors, and France’s suggestion comes ahead of President-elect Joe Biden’s inauguration in the coming week.

“The issue that’s poisoning everyone is that of the price escalation and taxes on steel, digital technology, Airbus and more particularly our wine sector,” said foreign minister Jean-Yves Le Drian in an interview with the Journal du Dimanche.

“If we could quickly find a method to settle this dispute with Europe and France, that would be a step forward,” he said. “It may take time but, in the meantime, we can always order a pause.”

At the end of December the United States moved to boost tariffs on French and German aircraft parts, wines and other spirits in the Boeing-Airbus subsidy dispute, but the bloc decided to hold off on retaliation for now. 

New US tariffs on French, German aircraft parts become effective

The US government on Monday (11 January) said it would begin collecting new duties on aircraft parts and other products from France and Germany from Tuesday after failing to resolve a 16-year dispute over aircraft subsidies with the European Union.

The EU is planning to present a World Trade Organization reform proposal in February and is willing to consider reforms to restrain the judicial authority of the WTO’s dispute-settlement body.

The United States has for years complained that the WTO Appellate Body makes unjustified new trade rules in its decisions and has blocked the appointment of new judges to stop this, rendering the body inoperable.

The Trump administration, which leaves office on Wednesday, had threatened to impose tariffs on French cosmetics, handbags and other goods in retaliation for France’s digital services tax, which it said discriminated against US tech firms.

In October, WTO members gave their green light for Brussels to slap tariffs on $4.0 billion  worth of US imports annually in retaliation for illegal American aid to plane maker Boeing.

The European Commission has so far held off on this possibility and is waiting for the new US administration to come into office in the hope of finding a broader settlement. Potential targets of EU sanctions include aircraft made in the United States, along with tractors, sweet potatoes, peanuts, frozen orange juice, tobacco, ketchup and Pacific salmon.

WTO members greenlight EU sanctions against US over Boeing aid

World Trade Organisation members gave the green light Monday (26 October) for Brussels to slap tariffs on $4.0 billion in US imports annually in retaliation for illegal American aid to plane maker Boeing.

[Edited by Frédéric Simon]

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